Debt cap: particular types of company: definition of dormant company
There are a number of provisions in the debt cap rules where a dormant company is excluded from an obligation.
For example, dormant companies are not:
- included in the gateway test
- a party to the appointment of an authorised company for statements of allocated disallowances or exemptions
- included in an election under S331ZA.
The definition of dormant company is in section 353 and is a company that is dormant within the meaning of section 1169 Companies Act 2006 which means that it has no significant transactions. A company incorporated outside the UK can similarly be dormant if it has no significant transactions in a period.
However a UK company is not dormant if there are transfer pricing adjustments made for it under subsections 147 (3) and (5) TIOPA.